Cyber*School

Result of different interest sensitivities of lending business and deposit-taking business of a bank. For example a bank is not refinancing its receivables with liabilities of the same period. That is increasing profits if long-term bonds are purchased and short-term refinanced if the interest rate curve is normal and short-term money is cheaper than long-term. Risk: Interest rate curve gets inverse.

another designation for end of the term or due date

Largest temporary decline in value after reaching a peak until the next positive counter movement. Tells how much the fund has dropped at its largest downward movement.

Maximum monthly or annual loss which the Fund has experienced so far.

Maximum monthly or annual appreciation which the Fund has experienced so far.

Medium-term bonds are the counterpart of the banks to the Federal Treasury bills. They are used for short-term capital increase.

Dealer transactions between banks are conducted at the same rate.

the effective yield depends on:- how the days of the interest period are calculated and- what is assumed concerning the number of days of a yearthe most frequent methods are:- act/360 (= money market method, actual calendar days, 360 days a year)- act/365 (365 days a year)- act/act- 30/360 (30 days a month, 360 days a year)- 30E/360

designation for Companies with a medium market capitalization

Funds that invest their funds primarily in medium-sized listed companies.

The abbreviation MiFID stands for Markets in Financial Instruments Directive. Directive on markets in financial instruments or short MiFID. MiFID is a European Union directive on the harmonization of the financial markets in the European internal market. The primary objective is transparency towards the private investors.

abbr. Market interest method

Investments in funds are usually only possible if the investment specified minimum amount is invested, which is set by the investment company. For further payments minimum amounts may be required by as well. Also for the periodic payments in savings plans a certain amount is usually prescribed by the investment companies.

The minimum amount of reserves a credit institution is required to hold with a central bank. The minimum reserve policy is one of the monetary instruments which regulate the money supply. An increase or a decrease has a direct effect on the liquidity of the banking sector. The minimum reserve is determined as percentage of customer deposits of a bank.

v. money market futures

It is called the theoretical model of the relationships between risk and return and how their relation can be optimized throught diversification.

expresses the estimated decrease of a bond price, if interest rate increases by 100 bp, and vice versa e.g.:bond price 103, modified duration 3.7 if the interest rate increases by 100 bp the bond price decreases by 3,7 % i.e. 3.81 new bond price: 99.19 (103 - 3.81)

Characterizes the market where short term interest instruments are traded (usually up to one year) (e.g. clean deposits, CDs, CPs, T-bills etc.)Market participants are domestic and international banks as well as Central Banks.

Funds that invest up to 100 percent of their assets in bank deposits, money market securities or securities with short maturities or regular yield adjustments. Money market funds are authorized in Germany since August 1, 1994.

futures with a money market-instrument as underlying, e.g. 3-months LIBOR-futures, alike an FRA there is no physical delivery of underlyings, i.e. the deposit, but only a compensation